Crypto Currency And How To Invest In It(Part 1)

  Hello my dear  friends I hope you all are doing well.  Today I am going to write about Crypto Currency, one of the most trending topic rig...

 Hello my dear friends I hope you all are doing well. Today I am going to write about Crypto Currency, one of the most trending topic right now. Everyone have queries regarding it, what is it, how it works etc. So I am gonna share information about Crypto Currency and I will try to clear your doubts, so stay tuned.

Today there are a lots of crypto currencies are available in market like BTC ,ETH, LiteCoin ,Doge  coin, Polygone etc but did you know how this all were started?

What is Crypto currency?

A crypto currency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Most of the crypto currencies are decentralized network based on blockchain technology - a distributed ledger enforced by a disparate network of computers.

If you can't under stand what are these terms then don't worry I will explain everything.

First Crypto currency is BTC aka Bitcoin. It was created by Satoshi Nakamoto, no one knows who he is or is this a name of an organization. We just know that Nakamoto collaborate with BTC developers till mid 2010. Satoshi Nakamoto started writing the code for BTC from beginning of 2007 and on 18th August 2008 he registered a domain name bitcoin.org and created a website at that address. On the 31st October the same year he released a white paper on the cryptography which is a peer to peer electronic cash system. Nakamoto never revealed his identity so still we don't know who it is really.

This was mainly invented because to get an alternative of fiat currency(The normal currency which were issued by governments). 

Advantages of Crypto currency:

1) There is no central authority, so no restrictions on transactions because there were no inter mediate.

2) Some Crypto currencies are limited, so you cannot mine them as much as you want. Like BTC, it is limited to 21million and you cannot mine more than that. But there is some currencies like ETH which has a constant supply of new currency.

3) Most of the Crypto currencies are transparent, which is normally stored in a public ledger. That means any one can see the source and the destination of that currency. But that's not mean anyone can access your personal data, they are usually encrypted.

4) Crypto currency has less transfer charges than other fiat currency and also it is more faster that any other transaction.

Disadvantages of Crypto Currency:

1) These transactions are irreversible that means if you transfer it to a wrong wallet then you will loose your money, and because there is no central authority that means you cannot complain anyone for the mistake.

2) Because Crypto currency is unregulated by any central authority that means any one can use it for illegal activities like drugs, money laundering, terrorist funding and all that.

3) For now this is one of the most volatile asset class. In the past we see 50% to 1000% upwards movement also the downwards movement. As of now common people didn't know much about these currencies so they might loose their money.

4) As Crypto currencies stored in a wallet it can be in digital form or physical form, so if you loose the password of your wallet or if you loose the physical wallet then your whole money will be gone and you cannot recover it from anywhere. (From a study we know that 20% of BTC is lost and no one can recover it.)

5) As Crypto currency is highly energy consuming thing, it makes it quite inefficient for environment, but some of the developers are currently working on it to make it efficient.

What is Blockchain Technology?

As we all know Crypto currency uses blockchain technology. So we must know how it works, and i will try to explain it in simple words.

Blockchain is a chain of blocks. Each blocks is used to store some information. The block stores information of transaction like who is the sender, receiver, and how much was transferred.

When one block is completely filled then the information automatically stored in next block, and this process continues. The important part of it is that each and every block points the previous block.

How the blocks points it's previous block?

Every block has a reference number or hash, so each block stored the reference number or hash of the previous block in it. So as you see every block is linked with the previous block hence the technology called blockchain technology.

It is very important in blockchain technology because if you try to remove a block from a chain then the whole blockchain will effect and hence if someone try to do this he will easily caught. That's why everyone believes it is very safe and secure technology. Still now the BTC data chain never hacked and it's been more than 10 years now and currently many developers working on it to make it more secure.

And the blockchain technology not only limited in Crypto currency, many organizations or companies now adopting it like Walmart, HSBC, Visa, Unilever, Ford, FDA, AIA group etc. Even Government of Dubai also using blockchain technology, that means this technology has a great potential to create new opportunities and new innovations.

In upcoming blog I will discuss more about Crypto currency. And now I am gonna tell you about how to invest in Crypto currency. Before investing in it you must consider it's risk factors because it is one of the most highly volatile asset.

How to start investing in Crypto currency?

As it is a digital currency so you need your digital presence, like you need digital payment methods to buy it, mostly we buy this currencies from various Crypto exchanges. Like---->

US: Binance, Robinhood, Gemini, Coinbase, FTX etc.

India: WazirX, CoinSwitch kuber, CoinDCX, COinDCX go, Binance India, Bitstamp India etc.

These are the exchanges where you can exchange your fiat currency. At first you have to add money to these exchanges wallets then you can easily buy/sell, or trade with these platforms 24 hours.. As it is a very new concept of currency many people don't know much about them, so to attract people some of these platforms holds some giveaway offers that you must check out.

Now as we know these are very risky assets but why? Here I am showing you some pictures for this

As you can see up here some times it's go up or down with very low margin but some times when a bull run or bear run happens then we never know where will these end up, because it is a decentralized and unregulated market no one never know where it might end up. Though some tweets of Elon Musk  triggered the whole market in recent months. That's why retail investors must do their own research and then they might invest in it or trade in it.

In the upcoming blog I will discuss more about how to invest in Crypto currency so stay tuned. I hope this will help you to under stand Crypto currency. And don't forget to share this with your love ones. Thank you😀

Editor:  Sk Elaf Ahmed, Rupak Chowdhury.